From an investor’s perspective, how do we take advantage of rising inflation in grocery items? There are some obvious ways that I will get to. But first, I want to discuss ways in which to avoid investment risk.
It has been well documented that the grocery segment is currently taking a beating, leading one analyst to stay completely out of the segment until he sees improving operating margins. Again, the poorness of margins, the A&P bankruptcy, and Kroger (KR) / Safeway (SWY) profit issues paint a big red stop sign on grocer stocks.
Grocers have not been able to pass food inflation fully to their customers, and most currently suffer from heavy debt. Consolidation isn’t an option for many of these companies.
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